Monday, January 4, 2021
American Lawyer, 2021 Forecast: Tax Attorneys Will Be in High Demand Thanks to the Pandemic and a New President:
Big Law tax practice leaders expect an even busier year for tax lawyers in 2021, with corporate clients still working through the sweeping changes from the Trump administration’s 2017 tax reform legislation.
What’s more, the economic impact of the COVID-19 pandemic is forcing cash-strapped states to seek new revenue sources, including tax increases, while federal and state tax authorities are stepping up enforcement. That will mean more work for corporate tax lawyers, whether they handle tax planning, controversy and litigation, or merger and acquisition deals.
Under the Biden administration, tax practice leaders expect that congressional gridlock will block any major federal tax legislation to counteract the Trump administration’s 2017 Tax Cuts and Jobs Act.
“If the Democrats had made more advances in the Senate, people would be more concerned,” says David Schnabel, the New York-based head of Davis Polk & Wardwell’s tax practice.
But “the outlook for tax is busy,” Schnabel says, because the 2017 tax reform law created “fundamental changes that are still being digested.” The Internal Revenue Service and U.S. Treasury Department have been issuing a “steady stream of new rules” for guidance since the legislation’s enactment that Schnabel expects to continue through 2021.